Adviser > Your business > RDR > December 2009 Update > Retail Distribution Review – Consultation Paper 09/31
Retail Distribution Review – Consultation Paper 09/31
Find out how the FSA's proposals on professional standards, corporate pensions and protection affect you and your business.
On 16 December 2009, the FSA published their fifth paper on the Retail Distribution Review (RDR), Consultation Paper 09/31 (CP09/31). This paper was effectively a supplement to the June 2009 paper, covering three areas that had been identified for further work. Our review mirrors the key areas covered in the paper:
What CP09/31 means for you
The paper contains 12 questions posed by the FSA to gauge industry views. The questions' scope suggests the FSA is getting very close to its final proposals.
We strongly encourage you to reply to the FSA by 16 March 2010 to ensure the FSA hears from the independent advice sector.
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Raising professional standards
The FSA has given further details over requirements for meeting the minimum qualification level post-2012 and their role in terms of governing professional standards. -
Corporate pensions
Indemnified commission is effectively banned on GPPs. An alternative remuneration model called Consultancy Charging is proposed. -
Pure protection
Indemnified commission can continue for protection but there is likely to be increased disclosure requirements. Extending the minimum qualifications to protection advisers is also raised.
This paper could turn out to be the most important of the RDR papers given it is now confirming the implications for advisers regarding remuneration and minimum qualifications.
RDR - a step in the right direction
We welcome the solutions proposed by the FSA and their long-term benefit for the industry. However, there is also the potential for short-term pain along the way, particularly around qualification requirements.
We are glad to see that corporate pensions is now firmly within scope. It would have been absurd to do nothing given that whatever commission biases the FSA identified in the individual pensions market clearly exist in the group pensions market.
We firmly believe that Consultancy Charging will represent a significant step forward for group pensions allowing providers to compete on the quality of their investment and administration services and product innovation rather than on commission.
Why Scottish Life is best placed for the group market
Our strong investment governance, five star service and awards for our group pension product means we can look forward to competing for business based on the services we provide to employers and their staff.
As Scottish Life distributes its products solely through intermediaries, your interests are intrinsically linked to our own. We want to know what you think about the RDR. Use our feedback form to tell us your views. We'll post comments and answer queries in due course, and also publish our response to the FSA's paper online.
Next page: Raising professional standards
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